BACKGROUND: Children and young people's mental health is a growing public health concern, which is further exacerbated by the COVID-19 pandemic. Mobile health apps, particularly those using passive smartphone sensor data, present an opportunity to address this issue and support mental well-being. OBJECTIVE: This study aimed to develop and evaluate a mobile mental health platform for children and young people, Mindcraft, which integrates passive sensor data monitoring with active self-reported updates through an engaging user interface to monitor their well-being. METHODS: A user-centered design approach was used to develop Mindcraft, incorporating feedback from potential users. User acceptance testing was conducted with a group of 8 young people aged 15-17 years, followed by a pilot test with 39 secondary school students aged 14-18 years, which was conducted for a 2-week period. RESULTS: Mindcraft showed encouraging user engagement and retention. Users reported that they found the app to be a friendly tool helping them to increase their emotional awareness and gain a better understanding of themselves. Over 90% of users (36/39, 92.5%) answered all active data questions on the days they used the app. Passive data collection facilitated the gathering of a broader range of well-being metrics over time, with minimal user intervention. CONCLUSIONS: The Mindcraft app has shown promising results in monitoring mental health symptoms and promoting user engagement among children and young people during its development and initial testing. The app's user-centered design, the focus on privacy and transparency, and a combination of active and passive data collection strategies have all contributed to its efficacy and receptiveness among the target demographic. By continuing to refine and expand the app, the Mindcraft platform has the potential to contribute meaningfully to the field of mental health care for young people.